EconPapers    
Economics at your fingertips  
 

Growth Effects of Government Expenditure and Taxation in Rich Countries: A Comment

Jonas Agell, Henry Ohlsson () and Peter Skogman Thoursie ()

No 2003:14, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: In a recent article Stefan Fölster and Magnus Henrekson [2001] argue that “…the more the econometric problems that are addressed, the more robust the relationship between government size and economic growth appears”. But in failing to control for simultaneity in a valid manner the regressions reported by Fölster/Henrekson are flawed. Moreover, using theoretically valid instruments we find that the estimated partial correlation between size of the public sector and economic growth is statistically insignificant and highly unstable across specifications. A policy-maker who wants to promote growth is well-advised to look for other evidence than cross-country growth regressions.

Keywords: Economic growth; public sector; cross-country regressions; panel regressions (search for similar items in EconPapers)
JEL-codes: E62 H20 H50 O57 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2003-11-06
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed

Downloads: (external link)
http://www2.ne.su.se/paper/wp03_14.pdf (application/pdf)

Related works:
Journal Article: Growth effects of government expenditure and taxation in rich countries: A comment (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:sunrpe:2003_0014

Access Statistics for this paper

More papers in Research Papers in Economics from Stockholm University, Department of Economics Department of Economics, Stockholm, S-106 91 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Tanja Appelberg ().

 
Page updated 2020-07-11
Handle: RePEc:hhs:sunrpe:2003_0014